Governments at all levels have been relentless in their efforts to reign in real estate – the top industry in 7 out of 10 provinces. Just think of how hard they’ve worked.
In February, 2016 the former Liberal government in BC increased the property purchase tax on homes over $2 million (impacting the vast majority of single detached homes in Vancouver). They then followed up with the introduction of the 15% foreign buyers tax for residential properties in Metro Vancouver.
The Federal government followed up with new rules for insured mortgages. Not to be outdone the Ontario Liberals introduced a 16 point plan to cool the market. Some might say “derail” the market. And finally the Federal government extended the new stress test rules for every mortgage application.
Judging by the recent headlines governments got their wish.
Canadian real estate prices see biggest drop worldwide – MacLeans, Jan. 29, 2018
Canadian Real Estate Prices Are Fastest-Falling In World, According To U.S. Fed – Huffington Post, Jan. 31, 2018
Canadian home sales, listings slump in January with arrival of new mortgage rules – CBC News, Feb. 15, 2018
Canadian Home Sales Hit Lowest Level in 3 Years – Toronto Star, Feb 15, 2018
The Canadian Real Estate Association just reported that three quarters of the Canadian market experienced a slump as January sales declined 14.5% compared to December. Toronto sales led the way down with a 26.6% drop while even Vancouver experienced a 10% fall. Although the results are not surprising given the number of people who rushed into the market in December in order to avoid the new stress test rules but sales were still down 2.4% nationally compared to a year earlier.
Toronto’s decline, which the city’s real estate board blames on the Ontario government’s actions, continued in January with sales off 22%. While some of the decline is attributed to the December rush it’s noteworthy that it’s the weakest showing in the last nine years.
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